Selling Reloaded Ammo

A friend at work and my boss - also a friend are about to make a deal.

The friend is a reloader - big time. My boss wants to buy some 9mm from him. On a regular basis.

I can see buying 50 or so rounds 3 or 4 times a year from him being copacetic - kinda like a face to face gun sale 3 or 4 times a year being legit but they're talking 500 rounds a pop 5 or 6 times a year.

I agree with OW, its probably legal (trading work/goods for money) but it can be an extreme liability. What if one of the rounds is loaded incorrectly and damages the gun? Worst case scenario, what if the operator is injured?

In order for this deal to work there would have to be a contract of some sort which accepts the inherent dangers of hand-loaded ammo and releases all rights of the consumer to legally harm the seller.

Texas Gun Person

April 5, 2010, 05:43 PM

I have several friends who buy reloaded ammo for IDPA. None of them have any sort of agreement or anything as far as legality goes. They just hand over cash for ammo. Just some guy who enjoys reloading.

danprkr

April 5, 2010, 06:47 PM

I've sold reloaded ammo before. There is some legalities if you do it for profit. I can't remember the exact wording, but it was something like - a significant portion of your income. Otherwise, it's just like selling any other private property.

I will say this. I was younger then, and there's no way I'm selling reloads now. I do have some friends, and we sometimes swap amongst ourselves, but since we've known each other MULTIPLE decades it's no biggie. But I've got to believe that before I'd sell to an outsider anymore I'd get set up with insurance and a license etc.

NavyLCDR

April 5, 2010, 06:57 PM

(b) Manufacturer of ammunition. A person who devotes time, attention, and labor to manufacturing ammunition as a regular course of trade or business with the principal objective of livelihood and profit through the sale or distribution of the ammunition manufactured;

If he is doing the above, he needs a license.

GonHuntin

April 5, 2010, 06:58 PM

http://www.atf.gov/firearms/faq/manufacturers.html#ammo-reloading

Q: Is a person who reloads ammunition required to be licensed as a manufacturer?
Yes, if the person engages in the business of selling or distributing reloads for the purpose of livelihood and profit. No, if the person reloads only for personal use.

[18 U.S.C. 922(a) (i) and 923(a), 27 CFR 478.41]

Q: Must a licensed manufacturer pay excise taxes?
Yes. Licensed manufacturers incur excise tax on the sale of firearms and ammunition manufactured. See Item 17, “Federal Excise Tax” in the General Information section of this publication.

dogtown tom

April 5, 2010, 06:59 PM

From the ATF FAQ's http://www.atf.gov/firearms/faq/manufacturers.html#ammo-reloading

Q: Is a person who reloads ammunition required to be licensed as a manufacturer?
Yes, if the person engages in the business of selling or distributing reloads for the purpose of livelihood and profit. No, if the person reloads only for personal use.

[18 U.S.C. 922(a) (i) and 923(a), 27 CFR 478.41]

NavyLCDR

April 5, 2010, 07:00 PM

Does ANYBODY know what the ATF has to say about it?!? :evil:

Werewolf

April 5, 2010, 07:24 PM

From the ATF FAQ's http://www.atf.gov/firearms/faq/manufacturers.html#ammo-reloading

The key seems to be no if for personal use.

There is some ambiguity in the ATF regs quoted as it doesn't address the guy who sells some to a buddy every now in then.

TexasRifleman

April 5, 2010, 07:30 PM

: Is a person who reloads ammunition required to be licensed as a manufacturer?
Yes, if the person engages in the business of selling or distributing reloads for the purpose of livelihood and profit. No, if the person reloads only for personal use.

Ahh, but there's the trick question. It doesn't say you can't sell ammo, it says you can't "engage in the business of selling or distributing reloads for the purpose of livelihood and profit". That piece you posted is from an FAQ, not the actual law.

There is some ambiguity in the ATF regs quoted as it doesn't address the guy who sells some to a buddy every now in then.

Those terms, "engaged in business" and "purpose of livelihood and profit" are specifically defined in Federal Law. From the wording of Federal Law it would appear to me that selling reloads to a friend who doesn't want to mess with it is clearly "personal use", not "engaged in the business" but go read the statute yourself. It seems pretty clear to me.

18 USC 44

(21) The term "engaged in the busi- ness" means—

(B) as applied to a manufacturer of ammunition, a person who devotes time, attention, and labor to manufac- turing ammunition as a regular course of trade or business]/b] with the [b]principal objective of livelihood and profit through the sale or distribution of the ammunition manufactured;

(22) The term "with the principal objective of livelihood and profit" means that the intent underlying the sale or disposition of firearms is pre- dominantly one of obtaining livelihood and pecuniary gain, as opposed to other intents, such as improving or liq- uidating a personal firearms collection:

http://www.atf.gov/publications/download/p/atf-p-5300-4.pdf

Certainly at some point it crosses that line, but there seems to be plenty of room for occasional stuff. Not a lawyer, just an English Speaker.

xd9

April 6, 2010, 12:56 AM

as long as you arn't involved in the deal i would worrie about it

mptrimshop

April 6, 2010, 01:03 AM

i see reloads at gun shows all the time for sale.......seems to go over just fine

SaxonPig

April 6, 2010, 01:06 AM

As we all know, the ATF has a history of liberal interpretations of federal law and often gives folks the benefit of the doubt.

GonHuntin

April 6, 2010, 09:17 AM

Not to mention the possibility of being prosecuted for tax evasion for failure to pay excise tax.......

Heck, the liability is enough to keep me from doing it!!

I have loaded ammo for friends, but did not charge and would not accept any compensation for doing so.

Art Eatman

April 6, 2010, 12:41 PM

Since they include the word "livlihood", which means making a living from the activity, a penny-ante amount of profit sure doesn't pass that test.

Just my opinion, of course, but that's how I'd interpret it.

Zoogster

April 6, 2010, 02:20 PM

The biggest concern would be liability. Even if the reloader does everything right every so many thousand rounds there will be a significant pressure difference just because the powders and primers are not 100% uniform. You can bet that would be blamed on the reloader if it resulted in any problems because the much more common problem of user error would be assumed.

Now someone can take various precautions, like using a powder that takes up too much space to ever allow a double charge, to reduce error, and not loading hot to reduce the problems associated with slightly pressure deviations in different chambers and barrels.
Yet the reloader is still going to be blamed even if they do everything right and it is not their fault.
Even an unnoticed barrel obstruction (bug, water, oil, etc especially on high pressure rounds can quickly spike pressures) causing overpressure problems or damage is going to be blamed on the reloaded ammo.
Pretty much anything resulting in problems for the shooter is going to be assumed the most likely culprit: the reloaded ammo. Even if it wasn't.

Any profits made selling to a few people will instantly vanish the first time a reloader is sued and are unlikely to even cover the legal fees.

The ATF uses wide discretion. If they feel it is a business they could hassle you. Contracts accepting liability for example could be used as evidence that it is in fact a formal business for profit and livlihood, not just a casual private transaction.
It is governed under the same areas of law that someone selling private firearms without a license is and the wording of when it requires a license is the same.
Sure it is legal, on occasion, but at some point they determine it is a felony offense when the number of private firearm sales reaches a point. A magical gray area that goes from legal to felony when they say so.
Sometimes the point they say it is illegal is low (like when a gun or two winds up traced after being used by some criminals) and sometimes it is high.
How does your regional branch feel about it on Tuesdays? Do they feel differently on Fridays? Is anyone on the no fly list involved?

BeerSleeper

April 6, 2010, 02:44 PM

I don't yet reload, but I've been researching the subject. Several of my shooting friends have said, "Cool, then I can just buy ammo from you..."

I haven't really responded to that one yet, but I think, what I will do, when I get set up, and they ask, I think I will let them come over to my place, and I will show them how to do their own reloading on my rig. There's probably still some liability exposure there, but still less than if you reloaded it for them.

ambidextrous1

April 6, 2010, 02:58 PM

I like that idea, BeerSleeper! :cool:

mgkdrgn

April 6, 2010, 05:49 PM

Since they include the word "livlihood", which means making a living from the activity, a penny-ante amount of profit sure doesn't pass that test.

Just my opinion, of course, but that's how I'd interpret it.
They also include the word "profit".

Unless he is selling ammo for no more than his component cost (ie, his time and capital investment is "free"), then he is making a profit, even if it might be a "penny ante" one. There isn't any threshold for how much profit you must make to fall under the code.

Unless you are in the reload "business" (that is, all properly licensed, bonded and insured) selling reloads is a very bad idea for a whole host or reasons.

Zoogster

April 6, 2010, 06:01 PM

They also include the word "profit".

Unless he is selling ammo for no more than his component cost (ie, his time and capital investment is "free"), then he is making a profit, even if it might be a "penny ante" one. There isn't any threshold for how much profit you must make to fall under the code.

Well I recommend against it for the reasons in my post above, but it does say "livlihood and profit". There is a strong legal distinction in many circumstances between "and" and "or". It does not say livlihood or profit, but rather combines them into a set of circumstances with the word "and".

An argument could be made that if it increases your quality of life through substantial profit it is contributing to your livlihood. If on the other hand it is a couple hundred bucks it has no substantial impact on the quality of life of someone making a middle class salary. So is not really a part of their "livlihood" or a second job.

So it is not simply any profit if sold.
However manufacturing them specifically to sell them could be interpreted similarly to building a gun to sell it. It is perfectly legal to build yourself a gun, and then sell it if you no longer wish to own it. You are also free to make a profit when you sell it.
It is entirely different to build a gun with the intent to sell it after. (Or to build many guns with the intent to sell them.)
One requires an FFL and the other does not. Since the law mentions both firearms and ammo with the same terminology I would assume similar may apply to making ammo specifically to sell it.
If you reloaded a lot of ammo, and then happened to sell some it would probably be fine (though I wouldn't for reasons in my above post), but making it specifically to sell it, especially on a regular basis even to friends may be crossing the line.

Bubbles

April 7, 2010, 09:20 AM

While we hold all the necessary licenses to manufacture and sell ammunition, we don't do it. Our insurance agent about had a heart attack when we discussed it.

BeerSleeper

April 7, 2010, 09:59 AM

That's what insurance agents do.

52grain

April 7, 2010, 10:21 PM

As we all know, the ATF has a history of liberal interpretations of federal law and often gives folks the benefit of the doubt.

SaxonPig-was that sarcasm?

Art Eatman

April 8, 2010, 12:58 AM

The consensus seems to be that problems could arise with BATFE and as usual the Old Devil of liability is there.

I don't see any possibility of any definitive answer, and there's no point in just "huntin' boogers."